GOVERNMENT OF MAHARASHTRA

LAW AND JUDICIARY DEPARTMENT

MAHARASHTRA  ACT  No.  XLVI  OF  1986

THE  CENTRAL  INDIA  SPINNING, WEAVING AND
MANUFACTURING  COMPANY  LIMITED,
THE  EMPRESS  MILLS,  NAGPUR
(ACQUISITION AND
TRANSFER  OF  UNDERTAKING)

ACT,  1986

(As modified upto the 1st November,  2012)

*

 PRINTED IN INDIA BY THE MANAGER, GOVERNMENT  PRESS AND
BOOK DEPOT, NAGPUR AND PUBLISHED BY THE DIRECTOR,
GOVERNMENT PRINTING, STATIONERY AND PUBLICATIONS,
MAHARASHTRA STATE, MUMBAI-400 004.

2012

[ Price—Rs. 9.00 ]

1986: Mah. XLVI ]

(i)

THE CENTRAL INDIA SPINNING, WEAVING AND MANUFACTURING
 COMPANY LIMITED, THE EMPRESS MILLS, NAGPUR
(ACQUISITION AND TRANSFER OF UNDERTAKING)
ACT, 1986
CONTENTS

PREAMBLE.

SECTIONS.

——————

CHAPTER  I
PRELIMINARY

1.

 Short  title  and commencement.

2. Definitions.

CHAPTER  II
ACQUISTION AND TRANSFER OF THE UNDERTAKING

3. Acquisition and transfer of undertaking and its vesting in State Government and its

transfer and vesting in Corporation.

4. General effect of vesting.

5. Proprietors to be liable for prior liabilities.

6. Power of State Government to direct vesting of undertaking in new Government

Company.

CHAPTER  III
PAYMENT OF AMOUNTS

7. Payment of amount.

8. Payment of further amount.

CHAPTER  IV
MANAGEMENT, ETC., OF THE UNDERTAKING

9. Management, etc., of the Undertaking.

10. Duty of persons in charge of management of undertaking to deliver all assets, etc.

11. Duty of person to account for assets, etc., in their possession.

CHAPTER  V
PROVISIONS RELATING TO EMPLOYEES OF THE PROPRIETORS

12. Employment of certain employees.

13. Provident fund and other funds.

J-1785-BK-4.  Form-1

(ii)

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah. XLVI

CHAPTER   VI
COMMISSIONER OF PAYMENTS

14. Appointment of  Commissioner of  Payments.

15. Payment by State Government to Commissioner.

16. Certain  powers  of  State   Government  or  Corporation  or new Government

   Company.

17. Claims to be made to Commissioner.

18. Priority of claims.

19. Examination of claims.

20. Admission  or  rejection of  claims.

21. Disbursement  of money  by  Commissioner  to  claimants.

22. Disbursement of amounts to proprietors.

23. Possession of machinery etc., not belonging to proprietors to continue.

24. Undisbursed or unclaimed amount to be deposited with general revenue account.

CHAPTER  VII

MISCELLANEOUS

25. Assumption of liabilities.

26. Act to have overriding effect.

27. Contracts  to  cease  to  have  effect  unless  ratified  by  State  Governemnt  or

Corporation or new Government company.

28. Protection of action taken in goodfaith.

29. Delegation of powers.

30. Penalties.

31. Offences by companies.

32. Company not to be woundup by Court.

33. Power to make rules.

34. Power to remove difficulties.

35. Repeal of Mah. Ord. V of 1986 and saving.

SCHEDULE.

MAHARASHTRA   ACT  No.  XLVI  OF  1986.1

[THE CENTRAL INDIA SPINNING, WEAVING AND MANUFACTURING COMPANY

LIMITED, THE EMPRESS MILLS, NAGPUR (ACQUISTION AND TRANSFER OF

UNDERTAKING)  ACT, 1986.]

[This Act received assent of the president on the 23rd day of December 1986 ;

assent  was first published in the Maharashtra Government Gazette,

Part IV, Extraordinary, on the 26th day of December, 1986.]

An Act to  provide  for  acquisition  and  transfer  of  undertaking  of  the Central  India

Spinning, Weaving  and  Manufacturing  Company  Limited,  with  a  view  to  securing

the  proper  management  of  such  undertaking  so  as  to  subserve  the   interest  of

the  general  public  by  ensuring  the continued  manufacture,  production  and  distribu-

tion  of  textile  and  paper  products  which are essential to the needs of the economy of

the  country  and  for  matters  connected  therewith  or  incidental  thereto.

WHEREAS, the Central India Spinning, Weaving and Manufacturing Company Limited,

being an existing company as defined in clause (ii) of  sub-section (1) of section 3 of the

I  of
1956.

Companies Act, 1956, had been engagged in the manufacture and production of yarn, cloth

and paper through its undertaking which was composite textile mill and paper manufacturing

unit, styled as the Central India Spinning, Weaving and Manufacturing Company Limited,

“The Empress Mills”, Nagpur ;

AND WHEREAS, in Petition No. 183 of 1986 filed by the company for voluntary winding

up, the High Court of Bombay had made an order for appointment of the provisional liquida-

tor and the proceedings for its liquidation were pendings ;

AND  WHEREAS,  the  company  had  declared  lock-out  throwing  about  more

than 6,000 workers out of employment and the undertaking has not been functioning since

3rd  May 1986 ;

AND WHEREAS, it was expedient to acquire the undertaking of the said company to

ensure that the interest of the general public and of the employees of the undertaking were

served by the continuance, by the undertaking of the said company, of the manufacture,

production and distribution of textile and paper products which are essential to the needs of

the country and to provide for matters connected therewith or incidental thereto ;

AND WHEREAS, such acquisition is for giving effect to the policy of the State towards

securing the principle specified in clause (b) of Article 39 of the Constitution ;

AND WHEREAS, both Houses of the State Legislature were not in session ;

1 For  Statement  of  Objects  and  Reasons,  see  Maharashtra  Government  Gazette,  1986,  Part  V,  Extra,

PP.  551––  552,  dated  the  20th  October  1986.

2

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah.XLVI

AND WHEREAS, the Government of  Maharashtra was satisfied that circumstances
existed which rendered it necessary for him to take immediate action to make a law for the
puroposes aforesaid ; and, therefore, pomulgated the Central India Spinning, Weaving and
Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of
Undertaking) Ordinance, 1986, on the 3rd October 1986 ;

Mah.
Ord.
V of
1986.

AND WHEREAS, it is expedient to replace the said Ordinance by an Act of the State
Legislature ; It is hereby enacted in the Thirty-seventh Year of the Republic of India as
follows :—

CHAPTER  I

PRELIMINARY

Short  title
and  com-
mencement.

1.

(1) This Act may be called the Central India Spinning, Weaving and Manufacturing
Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking)
Act, 1986.

(2) It shall be deemed to have come into force on the 3rd October 1986.

Definitions.

2.

In this Act, unless the context otherwise requires,—

(a) “appointed day” means the date of commencement of this Act ;

(b) “bank” means —

(i) the    State    Bank    of    India    constituted    under    the    State    Bank  of    India

Act, 1955;

(ii) a Subsidiary Bank as defined in the State Bank of India (Subsidiary Banks)

Act, 1959 ;

(iii) a  corresponding  new  bank  constituted  under  section  3  of  the  Banking
Companies  (Acquisition  and  Transfer  of  Undertakings)  Act,  1970  or  under
section    3  of  the  Banking  Companies  (Acquisition  and  Transfer  of  Undertakings)
Act, 1980 ;

(iv) any other bank, being a scheduled bank as defined in clause (e) of section 2 of

the Reserve Bank of India Act, 1934 ;

(c) “Commissioner”  means  the  Commissioner  of  Payment  appointed

under section  14 ;

(d) “Corporation” means the Maharashtra State Textile Corporation, a Government

company registered under the Companies Act, 1956 ;

(e) “Instituition” means —

(i) The  General  Insurance  Corporation  formed  under  section  9  of  the  General

Insurance Business (Nationalisation) Act, 1972,

23  of
1955.

38  of
1959.

5  of
1970.
40  of
1980.

2  of
1934.

I  of
1956.

57  of
1972.

(ii) The Industrial Credit and Investment Corporation of India, a Company being
an  existing  Company  as  defined  in  clause  (ii)  of  section  3  of  the  Companies
Act, 1956,

I  of
1956.

1986 : Mah.XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

18  of
1964.

XV of
1948.

(iii) The  Industrial  Devlopment  Bank  of  India  established  under  section  3  of  the

Industrial Devlopment Bank of India Act, 1964,

(iv) The Industrial Finance Corporation of India established under section 3 of the

Industrial Finance Corporation of India Act, 1948,

3

62  of
1984.

31  of
1956.

63  of
1951.

I  of
1956.

52  of
1963.

I  of
1956.

I  of
1956.

(v) The Industrial Re-construction Bank of India established under section 3 of the

Industrial Re-construction Bank of India Act, 1984,

(vi) The  Life  Insurance  Corporation  of  India  established  under  section  3  of  the

Life Insurance Corporation Act, 1956,

(vii) The Maharashtra  State Finance Corporation  established under section 3 of the

State Financial Corporation Act, 1951,

(viii) The State Industrial and Investment Corporation of Maharashtra a Company

registered under the Companies Act, 1956, or

(ix) The Unit Trust of India established under section 3 of the Unit Trust of India Act,

1963 ;

(f) “new Government company” means a Government Company (including a subsidiary
Government Company) formed and registered under the Companies Act, 1956, in which the
undertaking is directed to vest under sub-section (1) of section 6 ;

(g) “prescribed” means prescribed by rules made under this Act ;

(h) “proprietors”  means  the  Central  India  Spinning,  Weaving  and  Manufacturing
Company  Limited,  an  existing  company  as  defined  in  clause  (ii)  of  sub-section  (1)  of
section 3 of the Companies Act, 1956 with Registered Office at Army and Navy Building,
148, Mahatma Gandhi Road, Fort, Bombay -400 023 and includes the liquidator appointed
in petition No. 183 of 1986 in the Bombay High Court ;

(i) “Schedule” means the Schedule appended to this Act;

(j) “specified  date”,  in  relation  to  a  provision  of  this Act,  means  such  date  as  the
State  Government  may,  by  notifiaction  in  the  Official  Gazette,  specify  for  the  purposes
of  that  provision,  and  different  dates  may  be  specified  for  different  provisions  of  this
Act ;

(k) “undertaking”  means  the  industrial  undertaking  known  as  “the  Central  India

Spinning, Weaving and Manufacturing Company Limited, ‘the Empress Mills’, Nagpur”;

I  of
1956.

(l) words  and  expressions  used  herein  and  not  defined,  but  defined  in
the    Companies Act,  1956,  shall  have  the  meanings  respectively  assigned  to  them  in
that Act.

J-1785-BK-4.  Form-2

4

Acquisition
and  transfer
of  under-
taking  and  its
vesting  in
State
Government
and  its
transfer  and
vesting  in
Corporation.

General
effect  of
vesting.

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

CHAPTER  II
ACQUISITION AND TRANSFER OF THE UNDERTAKING

[1986 : Mah.XLVI

3.

(1) On the appointed day, the undertaking and the right, title and interest of the
proprietors in relation to the unedertakings, shall, by virtue of this Act, stand transferred to,
and vest absolutely in, the State Government.

(2) The  undertaking  which  stands  vested  in  the  State  Government  by  virtue  of
sub-section (1) shall, immediately after it has so vested, stand transferred to, and vested in,
the Corporation.

4.

(1) The  undertaking  shall  be  deemed  to  include  all  assets,  rights,  lease-holds,
powers, authorities and privileges, and all property, moveable and immoveable,  including
lands, buildings, workshops, stores, instruments, machinery and   equipment, cash balances,
cash on hand, reserve funds, investments, book debts and all other rights and interests, in or
arising out of, such property as were immediately before the appointed day in the ownership,
possession, power or control of the proprietors, whether within or outside India, and all
books of account, registers and all other documents of whatever nature relating thereto.

(2) All properties as aforesaid which have vested in the State Government under sec-
tion 3 shall, by force of such vesting, be freed and discharged from any trust, obligation,
mortgage,  charge,  lien  and  all  other  encumbrances  affecting  them,  and  any
attachment, injunction, decree or order of any court, tribunal or other authority restricting
the use of such properties in any manner shall be deemed to have been withdrawn.

(3) Every  mortgagee  of  any  property  which  has  vested  under  this Act  in  the  State
Government and every person holding any charge, lien or other interest in, or in relation, to
any such property shall give, within such time and in such manner as may be prescribed, an
intimation to the Commissioner of such mortagage, charge, lien or other interest.

(4) For the removal of doubts, it is hereby declared that the mortgagee of any property
referred to in sub-section (3) or any other person holding any charge, lien or other interest
in, or in relation to, any such property shall be entitled to claim, in accordance with his rights
and interest, payment of the mortgage money or other dues, in whole or in part, out of the
amount specified in section 7 and also out of the amounts referred to in section 8, but no
such mortgage, charge, lien or other interest shall be enforceable against any such property
which has vested in the State Government, the Corporation or new Government company.

(5) Any licence or other instrument granted to the proprietors in relation to  the undertak-
ing  which  has  vested  in  the  State  Government  under  section   3,  at any time before the
appointed day and in force immediately before that day, shall continue to be in force on
and after such day in accordance with its tenor in relation to, and for the purposes  of such

1986 : Mah.XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

5

undertaking, and on and from the date of vesting of such undertaking under section 3 in the
Corporation, or under section 6 in the new Government company, the Corporation, or new

government company, as the case may be, shall be deemed to be substituted in such licence
or other instrument as if such Licence or other instrument had been granted to the  Corpora-

tion,  or  new  Government  company,  and  that  the    Corporation,  or  the  new  Government
company, shall hold it for the remainder of the period for which the proprietors would have

held it under the terms thereof.

5.

(1) Every liability of the proprietors in relation to the undertaking in respect of any

period prior to the appointed day, shall be the liability of the proprietors and shall be enforce-
able against them and not against the State Government or against the Corporation or, where

the undertaking is directed under section 6 to vest, in a new Government company, against
the new Government company.

Proprietors
to  be  liable
for  prior
liabilities.

(2) For the removal of doubts, it is hereby declared that.—

(a) save as otherwise expressly provided in this section or in any other provision of
this Act, no liability, shall be enforceable against the State Government or the Corpora-
tion,  or,  where  the  undertaking  is  directed  under  section  6  to  vest  in  any  other  new
Government company, against such new Government company ;

(b) no award, decree or order of any court, tribunal or other authority in relation to the
undertaking  passed  on  or  after  the  appointed  day,  in  respect  of  any  matter,  claim  or
dispute, which arose before that day, shall be enforceable against the State government
or the Corporation or, where the undertaking is directed under section 6 to vest in any
other new Government company, against such new Government company ;

(c) no  liability  incurred  by  the  proprietors  before  the  appointed  day,  for  the
contravention of any provision of any law for the time being in force, shall be enforceable
against the State Government or the Corporation, or where the undertaking is directed
under  section  6  to  vest  in  any  other  new  Government  company,  against  such  new
Government company ;

(d) notwithstanding anything contained in sub-sections (1) and (2) of  section 12 or
any other provisions of this Act, or any other law for the time being in force or any
contract, agreement, settlement, award or decree or order of any court, tribunal or other
authority, no liability towards claims of whatever nature of any employee against the
proprietors in respect of his employment in the undertaking for the period prior to the
appointed day shall be enforceable against the State Government or the Corporation, or
where the undertaking is directed under section 6 to vest in any other new Government
company, against such new Government company.

6

Power  of
State
Govern-
ment  to
direct
vesting  of
undertaking
in  new
Govern-
ment
company.

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah.XLVI

6.

(1) Notwithstanding anything contained in sections 3 and 4, where the undertaking
vests, under sub-section (2) of section 3, in the Corporation, the State Government may,
subject to such terms and conditions as it may think fit to impose, direct, by notification in
the Official Gazette, that the undertaking and the right title and interest of the proprietors in
relation to the undertaking, which had vested in the State Government and which on its
transfer vest in the Corporation under section 3, shall instead of continuing to vest in the
Corporation, vest in a new Government company with effect from the date specified in the
notification.

(2) Where the right, title and interest of the proprietors in relation to their undertaking
vest, under sub-section (1), in the new Government company, such Government company
shall, on and from the date of such vesting, be deemed to have become the owner in relation
to such undertaking, and all the rights and liabilities of the State Government and the Corpo-
ration in relation to the undertaking shall, on and from the date of such vesting, be deemed
to have become the rights and liabilities of such Government company.

CHAPTER III

PAYMENT OF AMOUNTS

Payment  of
amount.

7. For the transfer to, and vesting in, the State Government under section 3, of the
undertaking and the right, title and interest of the proprietors in relation to the undertaking,
there shall be paid by the State Government to the proprietors, in cash, and in the manner
specified in Chapter VI, an amount of rupees six crores and ten lakhs :

Provided  that,  where  any  liability  of  the  proprietors  specified  in  the  Schedule  is
discharged  by  the  State  Government  or  the  Corporation  according  to  the  order  of  the
priorities mentioned in the Schedule, the amount to be paid to the proprietors under this
section shall stand reduced to that extent.

Payment  of
further
amount.

8.

(1) The amount payable in accordance with the provisions of section 7 shall carry
simple interest at the rate of four per cent.
per annum for the period commencing on the
appointed day and ending on the date on which payment of such amount is made by the
State Government to the Commissioner.

(2) The amount representing interest calculated at the rate specified in sub-section (1)
shall be given by the State Government to proprietors in addition to the amount specified in
section 7.

(3) For the removal of doubts it is hereby declared that the liabilities of the proprietors in
relation to their undertaking which has vested in the State Government or the Corporation
under section 3 shall be discharged from the amounts specified in section 7 and also from the
amounts  specified  in  sub-section  (1)  in  accordance  with  the  rights  and  interests  of  the
creditors of the proprietors.

1986 : Mah.XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

CHAPTER IV

MANAGEMENT, ETC. OF THE UNDERTAKING

7

9.

(1) The general superintendence, direction, contol and management of the affairs
and business of the undertaking, the right, title and interest in relation to which have vested
in the State Government under sub-section (1) of section 3, shall—

Manage-
ment,  etc.
of  the
undertaking:

(a) by  virtue  of  the  provisions  of  sub-section  (2)  of  section  3,  vest  in  the
Corporation or in such person and to such extent or limitations as the Corporation may by
order in writing, specify ; or

(b) where  a direction has been issued by the State Government under sub-section
(1) of section 6, vest in the new Government company or in such person and to such
extent or limitations as the new Government company may, by order in writing, specify ;

and thereupon the Corporation or the new Government company or, as the case may be, such
persons shall be entitled to exercise, to the exclusion of all other persons, all such powers
and do all such things as the proprietors were authorised to exercise and do in relation to
their undertaking.

(2) Notwithstanding anything contained in sub-section (1) or any other law for the time
being in force, it shall be lawful for the Corporation or the new Government company to
reorganise  the  functioning  of  the  different  units  and  offices  of  the  undertaking  and  the
employees employed therein and thereby restructure such units and offices with such strength
of employees as the Corporation or such new Government company deems fit.

10.

(1) On the vesting of the management of the undertaking in Corporation or the new
Government company all persons in charge of the management of the undertaking immedi-
ately before such vesting, including the liquidator appointed by the Court shall be bound to
deliver to the Corporation, or new Government company, as the case may be, all assets,
books of account, registers and other documents in their possession or custody or under
their control, relating to the undertaking.

Duty  of
persons  in
charge  of
management
of  undertak-
ing  to
deliver  all
assets,  etc.

(2) The State Government may issue such directions as it may deem desirable in the
circumstances  of  the  case  to  the  Corporation  or  new  Government  company,  and  such
corporation or new Government Company may also, if it is considered necessary so to do,
apply to the State Government at any time for instructions as to the manner in which the
management of the undertaking shall be conducted or in  relation to any other matter arising
in the course of such management.

11.

(1) Any  person  who  has  on  the  appointed  day,  in  his  possession  or  custody
or  under  his  control,  any  assets,  books,  documents  or  other  papers  relating  to  the
undertaking, which have vested in the State government or in the Corporation, or in the new
Government company under this Act, shall be liable to account for the said  assets,  books,

Duty  of
person  to
account  for
assets,  etc.,
in  their
possession.

8

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah.XLVI

documants  and  other  papers  to  the  State  Government,  or  the  Corporation  or  the  new

Government company, as the case may be, and shall deliver them to the State Government or

the Corporation or the new Government company or to such person or persons as the State

Government  or the Corporation or the new Government company may specify in this behalf.

(2) The  State  Government  or  the  Corporation  or  the  new  Government  company

aforesaid may take, or cause to be taken, all necessary steps for securing posession of the

undertaking  which  has  vested  in  the  State  Government  or  the  Corporation  or  the  new

Government company under this Act.

(3) The proprietors shall, within such period as the State Government may allow in this

behalf, furnish to that Government a complete inventory of all its properties and assets, as on

the appointed day, pertaining to the undertaking which has vested in the State Government

under sub-section (1) of section 3 and in the Corporation, by virtue of the provisions of

sub-section (2) of that section, or the new Government company and, for this purpose the

State Government or the Corporation or the new Government company shall afford to the

proprietors all reasonable facitities.

CHAPTER V

PROVISIONS RELATING TO EMOLOYEES OF THE PROPRIETORS

Emoloyment
of  certain
employees.

1 4
of
1947.

12.

(1) Where  services  of  a  person  who  is  a  workman  within  the  meaning  of  the

Industrial Disputes Act, 1947, and who has been, immediately before the appointed day,

employed in the undertaking, are, in the opinion of the Corporation necessary having regard

to requirements of the units restructured as a result of re-organisation of the undertaking, he

shall  become,  from  the  date  of  his  apointment  by  the  Corporation,  an  employee  of  the

Corporation and shall hold office or service in the Corporation with the same rights and

privileges as to pension, gratuity and other matters as would have been admissible to him if

the  rights  in  relation  to  the  undertaking  had  not  been  transferred  to,  and  vested  in,  the

Corporation and continue to do so unless and until his employment in such Corporation is

duly terminated or until his remuneration and terms and conditions of employment are duly

altered by the Corporation.

(2) Where  services  of  a  person  who  is  not  a  workman  within  the meaning of the

Industrial Disputes Act, 1947, and who has been immediately before the appointed day,

employed in the undertking, are, in the opinion of the Corporation necessary having regard

1 4
of
1947.

1986 : Mah.XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

9

to the requirements of the units or offices of the Corporation restructured as a result of
re-organisation of the undertaking, he shall become, from the date of his appointment by the
Corporation,  an  employee  of  the  Corporation  and  shall  hold  office  or  service  in  the
Corporation on such terms and  conditions of employment as may be determined by the
Corporation.

(3)

(a) The services of  every person employed by the proprietor before the appointed

day shall  stand terminated—

(i) on  the  designated  date  if  such  person  is  not  employed  before  that  date  by  the

Corporation under sub-section (1) or (2), and

(ii) on the date of his appointment if such person is employed before the designated

date by the Corporation under sub-section  (1) or (2).

(b)

A person whose services stand terminated under sub-clause (i) of clause (a) shall

not be entitled to claim employment in the Corporation as of right.

(4)

(a) Every person whose services stand terminated under sub-clause (i) of clause

(a) of sub-section (3) shall be entitled to—

39  of
1972.
14  of
1947.

(i) payment of gratuity and of compensation for retrenchment or closure in accor-
dance with the provisions of the Payment of Gratuity Act, 1972 and the Industrial Desputes
Act, 1947 if he is a workman within the meaning of the latter Act, and

(ii) payment of gratuity if he is not such a workman :

Provided  that,  no  person  whose  services  are  terminated  on  his  superannuation  on  or
before  the  designated  date,  shall  be  entitled  to  payment  of  compensation  for
retrenchment.

(b) Notwithstanding  anything  contained  in  Chapter  VI  and  notwithstanding  that  the
liability for payment of gratuity and compensation for retrenchment or closure under clause
(a) is that of the proprietors such liability shall be discharged by the State Government or the
Corporation, according to the order of priorities mentioned in the Schedule and on discharge
of such liability by the State Government or the Corporation the proprietors shall stand
discharged to the extent of the liability so discharged.

(5) Where,—

(a) the services of any person employed before the appointed day in the undertaking

are terminated.—

(i) under the terms of any contract or service or otherwise, or

(ii) under  sub-section  (3),  and

(b) such person is entitled to any arrears of salary or wages or any payment for any
leave not availed of or other payment not being payment by way of gratuity or compen-
sation for retrenchment,

10

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah. XLVI

such person may, except to the extent such liability of payment has been discharged by the

State  Government  or  the  Corporation  under  the  proviso  to  section  7,  enforce  his  claim

against  the  proprietors  of  the  undertaking  but  not  against  the  State  Government  or  the

Corporation :

Provided  that,  notwithstanding  anything  contained  in  the  Industrial  Disputes Act,

1947, the Payment of Wages Act, 1936, and the Payment of Gratuity Act, 1972,––

(a) the State Government or the Corporation shall not be liable,—

(i) to  any  person  who  has  become  an  employee  of  the  Corporation  under

sub-section (1) for payment of gratuity or any arrears of wages, or

(ii) to any person whose services stand terminated under sub-clause (i) of clause

(a) of sub-section (3) for payment of gratuity or any arrears of wages or compensation

for retrenchment or closure,

for the period commencing from the day on which the undertaking was closed and ending on

the day on which such person becomes an employee of the Corporation or, as the case may

be, on which  his services stand terminated irrespective of whether such closure was in

accordance with the provisions of  the Industrial Disputes Act, 1947 or not ;

(b) the  termination  of  services  of  a  person  under  sub-clause  (ii)  of  clause  (a)  of

sub-section (3) on his becoming an employee of the Corporation under sub-section (1) shall

14  of
1947.
IV  of
1936.
39  of
1972.

14  of
1947.

not entitle such person to payment of any gratuity.

Explanation.––In  this  Chapter––

(a) the expression “Corporation” includes “ new Government company ” ; and

(b) the expression “ designated date ’’ means such date as the State Government may,

by notification in the Official Gazette, designate.

Provident
fund  and
other  funds.

13.

(1) Where the proprietors have established a provident fund, superannuation fund,

welfare fund or any other fund for the benefit of the persons employed in the undertaking,

the monies relatable to the officers or other employees, whose services have been continued

on appointment to the Corporation shall, out of the monies standing on the appointed day to

the credit of such provident fund, superannuation fund, welfare fund or other fund, stand

transferred to and  vested in, the Corporation.

(2) The monies which stand transferred under sub-section (1) to the Corporation shall

be dealt with by the Corporation in such manner as may be prescribed.

1986 : Mah. XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

CHAPTER VI

COMMISSIONER OF PAYMENTS

14.

(1) The  State  Government  shall,  for  the  purpose  of  disbursing  the  amounts

payable under sections 7 and 8 to the proprietors, by notification in the Official Gazette,

appoint a Commissioner of Payments.

(2) The State Government may appoint such other persons as it may think fit to assist
the Commissioner and thereupon the Commissioner may authorise one or more of such
persons also to exercise all or any of the powers exercisable by him under this Act and
different persons may be authorised to exercise different powers.

(3) Any person authorised  by the Commissioner to exercise any of the powers exercis-
able by the Commissioner may exercise those powers in the same manner and with the same
effect as if they have been conferred on that person directly by this Act and not by way of
authorisation.

(4) The    salaries  and  allowances  of  the  Commissioner  and  other  persons  appointed

under this section shall be defrayed out of the Consolidated Fund of the State.

15.

(1) The State  Government shall, within thirty days from the specified date pay in

cash to the Commissioner for Payment to the proprietors,––

(a) an  amount  equal  to  the  amount  specified  in  section  7,  after  deducting  there-

from any amount paid under clause (b) of sub-section (4) of section 12 ; and

(b) an amount equal to the  amount payable to the proprietors under section 8.

(2) A  deposit  account  shall  be  opened  by  the  State  Government  in  favour  of  the
Commissioner in the Public Account of the  State, and every amount paid under this Act to
the Commissioner shall be deposited by him to the credit of the said deposit account and the
said deposit account shall be operated by the Commissioner.

(3) Records shall be maintained by the Commissioner in respect of the undertaking in

relation to which payment has been made to him under this Act.

(4) The interest accruing on the amount standing to the credit of the deposit account

referred to in sub-section (2) shall accrue to the benefit of the proprietors.

16.

(1) The State  Government or the Corporation or, where a direction has been issued
by the State Government under sub-section (1) of section 6, the new Government company,
as the case may be, shall be entitled to receive up to the specified date, to the exclusion of all

11

Apointment
of  Commis-
of
sioner 
Payments.

Payment  by
State
Government
to  Commissioner.

Certain  powers
of  State
Government  or
Corporation  or
new Government
company.

12

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah. XLVI

other persons, any money due to the proprietors, in relations to their undertaking which has
vested in the State Government, or the Corporation or in the new Government company, and

realised after the appointed day, notwithstanding that the realisation pertains to a  period

prior to the appointed day.

(2) The State Government or the Corporation or the new Government company, as the
case may be, may make a claim to the Commissioner with regard to every payment made by

it  after  the  appointed  day,  not  being  payment  made  under  the  proviso  to  section  7,  for

discharging any liability of the proprietors, in relation to any period prior to the appointed

day, and every such  claim shall have priority, in accordance with the priorities attaching,

under this Act, to the matter in relation to which such liability has been discharged by the

State Government, or the Corporation or the new Government company.

(3) Save as otherwise provided in this Act, the liabilities of the proprietors in respect of

any period prior to the appointed day, shall be the liabilities of the proprietors.

Claims  to
be  made  to
Commis-
sioner.

17. Every person having a claim other than the claim relating to gratuity or compensa-

tion for retrenchment or closure against the proprietors with regard to any of the matters

specified in the Schedule pertaining to the undertaking, shall prefer such claim before the

Commissioner within thirty days from the specified date :

Provided that, if the Commissioner is satisfied that the claimant was prevented by suffi-

cient cause from preferring the claim within the said period of thirty days, he may entertain

the claim within a further period of thirty days  but not thereafter.

Priority  of
claims.

18. The claims arising out of the matters specified in the Schedule shall have priorities

in accordances with the following principles, namely :—

(a) category I shall have precedence over all other categories and category II shall
have precedence over categories III and IV ; and category III shall have precedence over
category IV ;

(b) the claims arising out of matters specified in each category except category III
shall rank equally and be paid in full, but if the amount is insufficient to meet such claims
in full, they shall abate in equal proportions and be paid accordingly;

(c) the liabilities specified in category III shall be discharged in the manner agreed to
by the State Government of one part with the banks and institutions of other part subject
to the priorities specified in this section, in accordance with the terms of the secured loans
and the priority inter se of such loans ; and

1986 : Mah.  XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

13

(d) the question of  payment of a liability with regard to a matter specified in a lower
category shall arise only if a surplus is left after meeting all the liabilities specified in the
immediately higher category.

19.

(1) On receipt of the claims made under section 17, the Commissioner shall arrange
the  claims  in  the  order  of  priorities  specified  in  the  Schedule  and  examine  the  same  in
accordance with such order of priorities.

Examina-
tion  of
claims.

(2) If, on examination of the claims, the Commissioner is of opinion that the amount paid
to him under this Act, is not sufficient to meet the liabilities specified in any lower category,
he shall not be required to examine the claims in respect of such lower category.

20.

(1) After  examining    the  claims  with  reference  to  the  priorities  set  out  in  the
Schedule, the Commissioner shall fix a date on or before which every claimant shall file the
proof  of  his  claim  or  be  excluded  from  the  benefit  of  the  disbursement  made  by  the
Commissioner.

Admission
or  rejection
of  claims.

(2) Not  less  than  fourteen  days’  notice  of  the  date  so  fixed  shall  be  given  by
advertisement in one issue of such daily newspaper in the English language, and one issue
of  such  daily  newspaper  in  the  Marathi  language  as  the  Commissioner  may  consider
suitable, and every such notice shall call upon the claimant to file the proof of his claim with
the Commissioner within the period specified in the advertisement.

(3) Every claimant, who fails to file the proof of his claim within the period specified by

the Commissioner shall be excluded from the disbursements made by the Commissioner.

(4) The Commissioner shall, after such investigation as may, in his opinion, be necessary
and after giving the proprietors an opportunity of refuting the claims and after giving the
claimant a reasonable opportunity of being heard, admit or reject, by order in writing, the
claim in whole or in part.

(5) The Commissioner shall have the power to regulate his own procedure in all matters
arising out of the discharge of his functions, including the place or places at which he may
hold his sittings and shall, for the purpose of making an investigation under this Act, have
the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while
trying a suit, in respect of the following matters, namely :—

V of
1908.

(a) the summoning and enforcing the attendance of any witness and examining him

on oath ;

(b) the discovery and production of any document or other material object producible

as evidence ;

(c) the reception of evidence on affidavits ; and

(d) the issuing of any commission for the examination of witnesses.

14

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah. XLVI

(6) Any investigation before the Commissioner shall be deemed to be a judicial proceed-

ing within the meaning of sections 193 and 228 of the Indian Penal Code, and the Commis-

sioner shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI

of  the Code of Criminal Procedure, 1973.

XLV
of
1860.
II  of
1974.

(7) A claimant, who is dissatisfied with the decision of the Commissioner, may prefer an

appeal against such decision to the principal civil court of original jurisdiction within the

local limits of whose jurisdiction the registerd office of the proprietors is situated :

Provided that, where a person who is a Judge of a High Court is appointed to be the

Commissioner, such appeal shall lie to the High Court of Bombay and such appeal shall be

heard and disposed of by not less than two Judges of that High Court.

21. After admitting a claim under this Act, the amount due in respect of such claim shall

be credited by the Commissioner to the relevant fund or be paid to the person or persons to

whom such amount is due, and on such credit or payment, the liability of the proprietors in

respect of such claim shall stand discharged.

22.

If, out of the monies paid to him in relation to the undertaking, there is a balance left

after meeting the liabilities as specified in the Schedule, the Commisssioner shall disburse

such balance to the proprietors.

23. Where the possession of any machinery , equipment or other property has vested

in the State Government, or Corporation, or new Government company under this Act, but

such machinery, equipment or other property does not belong to the proprietors, it shall be

lawful  for  the  State  Government  or  the  Corporation  or  such  Government  company  to

continue to possess such machinery or equipment or other property on the same terms and

conditions  under  which  they  were  possessed  by  the  proprietors  immediately  before  the

appointed day.

24. Any money paid to the Commissioner which remains undisbursed or unclaimed on

the date immediately preceding the date on which the office of the Commissioner is finally

wound up, shall be transferred by the Commissioner before his office is finally wound up, to

the  general  revenue  account  of  the  State  Government  ;  but  a  claim  to  any  money  so

transferred may be preferred to the State Government by the person intitled to such payment

and shall be dealt with as if such transfer had not been made, and the order, if any, for

payment of the claim, being treated as an order for the refund of revenue.

Disburse-
ment  of
money  by
Commis-
sioner  to
claimants.

Disburse-
ment  of
amounts  to
proprietors.

Possession
of
machinery
etc.  not
belonging
t o
proprietors
to  continue.

Undisbursed
or
unclaimed
amount  to
be  deposited
with  general
revenue
account.

1986 : Mah.XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

15

CHAPTER  VII

MISCELLANEOUS

25.

(1) Where  any  liability  of  the  proprietors  arising  out  of  any  item  specified  in
category I of the Schedule is not discharged fully by the Commissioner out of the amount
paid under this Act, the Commissioner shall intimate in writing to the State Government the
extent of the liability which remains undischarged and that liability shall be assumed by the
State Government.

Assumption
of  liabilities.

(2) The State Government may, by order, direct the Corporation to take over any liability
assumed by the Government under sub-section (1) and on receipt of such direction, it shall
be the duty of the Corporation to discharge such liability.

26. The provisions of this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law for the time being in force or in any instrument having
effect by virtue of any law, other than this Act or in any decree or order of any court, tribunal
or  other authority.

Act  to  have
overriding
effect.

27. Every contract entered into by the proprietors in relation to their undertaking, which
has vested in the State Government under section 3, for any service, sale or supply, and in
force immediately before the appointed day, shall on and from the expiry of one hundred and
eighty days from the appointed day, cease to have effect unless such contract is, before the
expiry of that period, ratified, in writing by the State Government, or the Corporation, or new
Government company, in which such undertaking has been vested under this Act, and in
ratifying such contract, the State Government, or the Corporation or the new Government
company, as the case may be, may make such alteration or modification therein as it may
think fit:

Contracts  to
cease to have
effect  unless
ratified  by
State
Government
or  Corpora-
tion  or  new
Government
company.

Provided  that,  the  State  Government,  or  the  Corporation,  or  the  new  Government
company shall not omit to ratify a contract and shall not make any alteration  or modification
in a contract,—

(a) unless it is satisfied that such contract is unduly onerous, or has been entered
into in bad faith, or is detrimental to the interest of the State Government, or the Corpora-
tion or the new Government company ; and

(b) except after giving the parties to the contract a reasonable opportunity of being
heard  and except after recording in writing its reasons for refusal to ratify the contract or
for making any alteration or modification therein.

28. No suit, prosecution or other legal proceeding shall lie against the State   Govern-
ment, or the Corporation, or the new Government company or any officer or other employee
of that Government, or the Corporation or the new Government company, or other person
authorised by the State Government or the Corporation,  or the new Government company
for anything, including any damage caused or likely to be caused by anything , which is in
good faith done or intended to be done under this Act.

Protection
of  action
taken  in
good  faith.

16

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah.XLVI

Delegation
of  powers.

29.

(1) The  State Government may, by notification in the Official Gazette, direct that
all or any of the powers exercisable by it under this Act, other  than the powers conferred by
this section, section 33 and section 34, may also be exercised by such person or persons as
may be specified in the notification.

(2) Whenever any delegation of power is made under sub-section (1), the persons to
whom such power has been delegated shall act under the direction, control and supervision
of the State Government.

Penalties.

30. Any person who,—

(a) having  in  his  possession,  custody  or  control  any  property  forming  part  of  the
undertaking  wrongfully  withholds  such  property  from  the  State  Government  or  the
Corporation or the new Government company or any person or body of persons specified
by the State Government, Corporation or, as the case may be, new Government comapany,
in this behalf ; or

(b) wrongfully obtains possession of, or retains, any property forming part of the

undertaking ; or

(c) wilfully withholds or fails to furnish to the State Government, or the Corporation,
or the new Government company, as the case may be, or any person or body of persons
specified by that Govenment, or the Corporation or the new Government company, any
document  relating  to  the  undertaking,  which  may  be  in  his  possession,  custody    or
control ; or

(d) fails  to  deliver  to  the  State  Government,  or  the  Corporation,  or  the  new
Government company, as the case may be, or to any person or body of persons specified
by that Govenment, or the Corporation, or the new Government company, any assets,
books  of  account,  registers  or  other  documents  in  his  possession,  custody  or
control relating to the undertaking ; or

(e) wrongfully  removes  or  destroys  any  property  forming  part  of  the

undertaking ; or

(f) wrongfully prefers any claim under this Act which he knows or has reasonable

cause to believe to be false or grossly inaccurate ;

shall, on conviction, be punished with imprisonment for a term which may extend to two
years, or with fine which may extend to ten thousand rupees, or with both.

Offences  by
companies.

31.

(1) Where an offence under this Act has been committed by a company, every
person,  who,  at  the  time  when  the  offence  was  committed,  was  in  charge  of,  and  was
responsible to, the company, for the conduct of the business of the company, as well as the
company, shall be deemed to be guilty or the offence and shall be liable to be proceeded
against and punished accordingly :

1986 : Mah.XLVI]

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

17

Provided that, nothing contained in this sub-section shall render any such person liable
to any punishment, if he proves that the offence was committed without his knowledge or
that he had exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1) where any offence under
this Act  has  been  committed  by  a  company  and  it  is  proved  that  the  offence  has  been
committed with the consent or connivance of, or is attributable to any neglect on the part of,
any director, manager, secretary or other officer of the company, such director, manager,
secretary or other officer shall be deemed to be guilty of the offence and shall be liable to be
proceeded against and puished accordingly.

Explanation.—For the purposes of this section,—

(a) “company” means any body corporate, and includes a firm or other association of

individuals ; and

(b) “director” in relation to a firm, means a partner in the firm.

32. No proceeding for the winding up of the company, the right, title and interest in
relation to the undertaking owned by which, have vested in the State Government or the
Corporation or the new Government company  under this Act shall lie or be proceeded with
in any Court except with the consent of the State Government.

Company
not  to  be
wound up by
Court.

33.

(1) The State Government may, by notification in the Official Gazette, make rules

for carrying out the provisions of this Act.

Power  to
make  rules.

(2)

In particular, and without prejudice to the generality of the foregoing power, such

rules may provide for all or any of the following matters, namely :—

(a) the  time  within  which,  and  the  manner  in  which,  an  intimation  referred  to  in

sub-section (3)  of section 4 shall be given be given to the Commissioner ;

(b) the  manner  in  which  the  monies  in  any  provident  fund  or  other  fund  under

section 13 shall be dealt with ;

(c) any other matter which is required to be, or may be, prescribed.

(3) Every rule made by the State Government under this Act shall be laid, as soon as may
be, after it is made, before each House of the State Legislature, while it is in session, for a total
period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediatedly following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the rule or
both Houses agree that the rule should not be made, then on publication of such decision in
the Official Gazette, the rule shall have effect only in such modified form or be of no effect,
as the case may be ;  so, however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that rule.

18

Central India Spinning, Weaving and  Manufacturing
Company Limited, The Empress Mills, Nagpur
(Acquisition and Transfer of Undertaking)
Act, 1986.

[1986 : Mah. XLVI

Power  to
remove
difficulties.

34.

If  any  difficulty  arises  in  giving  effect  to  the  provisions  of  this Act,  the  State
Government may, by order, not inconsistent with the provisions of this Act, remove the
difficulty :

Provided that, no such order shall be made after the expiry of the period of two years, from

the date of commencement of this Act.

Repeal  of
Mah.  Ord.
V  of  1986
and  saving.

35.

(1) The Central India Spinning, Weaving and Manufacturing Company Limited,
the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Ordinance, 1986, is
hereby repealed.

Mah.
Ord.
V of
1986.

(2) Notwithstanding such repeal, anything done or any action taken (including any rule
made, order or notification issued or any appointment made or direction issued) under the
said Ordinance shall be deemed to have been done, taken, issued or made, as the case may
be, under the corresponsding provisions of this Act.

SCHEDULE

[See sections 2(h), 17, 18, 19, 20(1) and 22]

ORDER OF PRIORITIES FOR THE DISCHARCE OF LIABILITIES OF THE
PROPERIETORS

Category I—

All dues including gratuity of employees in the undertaking ; arrears relating to contribu-
tions towards Provident Fund and contrbutions under the Employees’ State Insurance Act,
1984 , payable by the proprietors.

XXX-
IV
of
1948.

Category II—

Arrears of excise duty, sales-tax, dues relating to electricity and dues of a local authority.

Category III—

Secured creditors including banks and institutions.

Category IV—

(I) Sundry creditiors.

(II) Other liabilities.

PRENTED AT THE GOVERNMENT PRESS, NAGPUR.

Maharashtra Government Publications can
be obtained from—

                   ♦ THE DIRECTOR

GOVERNMENT PRINTING, STATIONERY AND PUBLICATIONS
Maharashtra State
Netaji Subhash Road, MUMBAI 400 004.
Phone : 2363 26 93
2363 11 48

2363 06 95
2363 40 49

                   ♦ THE MANAGER

GOVERNMENT PHOTOZINCO PRESS AND BOOK DEPOT
Photozinco Press Area, Near G. P. O.
PUNE-411 001.
Phone: 261 25 808,

261 24 759, 261 28 920

♦ THE MANAGER

GOVERNMENT PRESS AND BOOK DEPOT
Civil Lines,
NAGPUR-440 001.
Phone : 252 26 15

♦  THE ASSTT. DIRECTOR

GOVERNMENT STATIONERY STORE AND BOOK DEPOT,
Shaha Ganj, near Gandhi Chowk
AURANGABAD 431 001.
Phone :  233 14 68

♦ THE MANAGER

GOVERNMENT PRESS AND STATIONERY STORE
Tarabai Park,
KOLHAPUR-416 003,
Phone : 265 03 95,

265 04 02

AND THE RECOGNISED BOOK  SELLERS.

